Random thoughts from a few cantankerous American physicians. All contributors are board certified. Various specialties are represented here. I do not know where this will lead but hope it will at least be an enjoyable read. All of the names mentioned in this blog are pseudonyms, the ages have been changed, and in half the cases the gender as well. All photographs are published with patient consent or are digitally altered to preserve anonymity. Trust us, we're doctors.

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Sunday, January 27, 2008

WARNING: This isn't a funny or fascinating post....it's informational and boring.

A few years ago, our CMG (contract management group) decided to go "out of network" on all health plans. That meant that any patient who was obligated to use our hospital by their insurance would still get a full charge from us.

I didn't know about it until a friend got a huge bill and complained to me.

It didn't seem fair to me.

Well, now that we're trying to fire our CMG and start our own group, they're appealing to the hospital. Their sales pitch is that we/they make about $800,000/year by being out of network. My response is that cutting out the 30% we send these bastards is slightly more and therefore we don't need them.

I also discovered that the Texas Association of Business is trying to pass legislation that would require hospital based physicians (Emergency, Pathology, Anesthesia) to charge the "in network" rate. Therefore, the CMG argument may be moot.

certain HMOs will muscle the hospital (i.e. threaten to pay them less) if the in-house specialties do not sign up to be "in-network" - this happened to our group costing us 30% of our total income. The hospitals are complicit in this in that they will not stand up to the HMOs for fear of retribution. Pussies.

"the Texas Association of Business is trying to pass legislation that would require hospital based physicians (Emergency, Pathology, Anesthesia) to charge the "in network" rate."

Isn't that kind of like all the doctors telling McDonalds that it can only charge 50 cents for a cheeseburger? Or like telling lawyers that they can only charge as much as the lowest paid lawyer in the region charges?

WCR: yes, it is. It is only "acceptable" in our line of work since hospitals make up the loss on certain contracts by passing the increased expenses along to everyone else.

The problem here, for us is that we're at the mercy of the hospital on these contracts. They make the deals and they can afford to deal in volume or take a slight loss on a contract in order to sign exclusive rights with a large insurance carrier.

As individual physicians, we don't have that luxury, and can't make up the loss on the back end of the contract like with rehab or wound care, or whatever.

God help the poor sap with no insurance, because he's getting the biggest bill. ("would you like a $10 Tylenol for your headache?")

But it makes as much sense as the other analogy that we see every day in the ED....marching into McDonalds and saying "I'm hungry, so feed me...you make enough money and it's my right spend my money on tatoos, cell phones, cocaine, Winstons, and Jack then eat for free.".

I drive, check in and am whisked back for an exam by a wonderful ER physician. It is appendicitis, afterall. The surgeon on call is paged, and I am taken for an lap appy. I stay the regulated AoA 23-hour observation time, wheeled out to the front door and promptly shoved out on my ass.

Who pays for the ER doctor, the pathologist, and the surgeon's bills? Me or AoA insurance?

So, if the bill passes, you will have to charge the "contract" rates without actually having entered into a contract. How will this work as all physician groups negotiate a different contract with each insurance company? Upon what rate of pay will you be based by default? This is a reimbursement nightmare to say the least.With regard to the patients: patients need to become educated about the way insurance works and do something about it. IMHO we should remove all "group insurance coverage" and all "contracting", this would push the insurance systems to change to a more customer oriented stance and changes would happen.

Surfie: You are correct in your suspicion that despite having "good" insurance and being forced to come to my hospital....your 20 wonderful and enjoyable minutes with me would be charged to you at FULL RATE.

My CMG has no preferred networks or reduced fee agreements. So, your AoA insurance would pay whatever they wanted to pay on my bill (usually the negotiated price with other docs in their network), and YOU would have to pay the balance.

How is that for fair?

The part that sucks is that you have no way of knowing if the ER Docs, Pathologists, Radiologists, and Anesthesiologists are in your network or not....chances are, the docs have no idea either.

It's impossible to be an informed consumer.

Qiwi: You raise an interesting question. The answer to your question is that in reality, the physician fee would probably be negotiated by the hospital and the fee then "forced" on the physician with a contractual addendum that hospital based physicians must agree to fees negotiated by the hospital.

You can see the potential problem right here. The hospitals aren't ever looking out for the physician's income, they're looking out for the hospital.

I worked in a group a few years ago where we had such an agreement. There were certain insurance patients we didn't want to see because our reimbursements were so low we didn't even cover our overhead.

I'm glad that some of you have found this post and subject as interesting as I did.

The legality of this is mind blowing. I can easily think of situations where your pay will become non existant and with no recourse. The issue of cross-state reimbursement issues are huge. Additionally it is your right as a business person to be able to set your fee-scale and recieve an opportunity to negotiate such. I'm not sure how independent physicians who work exclusively in a hospital environment will be able to manage their cash flow, I predict you'll start recieving lower and lower reimbursements until all contracts equal the medicare, or worse, medicaid fee schedule. With the reasoning that there is nothing that the er doc can do to negotiate for better (or livable) wages. Basically all ER docs will have to become "owned" by the hospital and we will have no more independant er groups in TX. Unfortunately this will probably spread to other states. What a loss.

Everyone should read qiwi's comment. He is EXACTLY correct. His predictions are happening right now in my state. What we are paid is presently defaulting to Medicare rates. This is why I constntly rail against our professional societies: they are run by political morons and do NOTHING to protect physician incomes. Now I'm all pissed off.

I appreciate the compliment on behalf of Texas Medical Association. In Texas and many other states, network adequacy and balance billing have been hotly contested issues. For the past two session of the Texas Legislature, TMA successfully fought efforts to ban balance billing. Instead, we gained passage of Senate Bill 1731, which requires more transparency on the part of physicians, hospitals, and health plans so patients are better informed about what they may be charged for certain services and in some instances, that they may be billed for services provided by out-of-network providers.

Health plans need to be held accountable for creating and maintaining their networks. Inadequate networks only benefit the health plan and result in more risk being pushed down to the patient in the form of greater out of pocket costs such as higher copays, coinsurance, and in some instances, balance billing. Patients already pay high premiums in today’s market for health care coverage. They deserve to have access to covered services through network physicians and less out of pocket costs.

SB 1731 also created a network adequacy advisory committee to the Texas Department of Insurance that now is studying the adequacy of health plan networks, particularly facility-based providers within those networks. I sit on this advisory committee as TMA’s representative. The legislation primarily focuses on data collection from the health plans about their networks. Over the course of the next month, the Texas Department of Insurance will collect information from the health plans about their networks and begin to identify where the “holes” are and hopefully shine a light on the reasons why inadequate networks exist. TMA has offered to provide additional information on physician participation and how the health plans approach contracting with facility-based physicians. TMA will include questions on the 2008 TMA Physician Survey Questionnaire that will help provide current data to TDI on physician participation in the health plan networks.

TMA will continue to play an active role in these deliberations to assure that patients get the accurate, current, and honest information they need about the adequacy of their plan’s network and the possibility that they will be treated by out-of-network physicians.